Challenges Faced by McDonalds in Global Business Environment

Running Head: MANAGEMENT
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International business
7/11/2019

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Contents
Introduction............................................................................................................... 2
Future challenges for McDonalds in global business environment............................................2
Influence of international trade (theories)..........................................................................5
Foreign direct Investment (FDI) in McDonalds...................................................................6
Manipulation of International financial markets for competitive advantage.................................8
Conclusion................................................................................................................ 9
References.............................................................................................................. 10

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Introduction
The report brings about the discussion on the concept of management practices and
challenges faced by organisations in global business environment. Businesses operating in the
society are affected by the external environment, which includes their competitors. The
global factors or environment that influences the working of an organisation include number
of things. A business organisation faces these challenges, in their working affecting their
performance and advantage in the industry. The company ‘McDonalds’ has been taken in
this report to analyse the challenges, theories of international trade, and other phenomenon. In
the later part, the report will mention the company’s involvement into maintaining the trade
relations inclusive of the foreign direct investments. Thus, the readers will gain an
understanding of different factors that influence the working of the company in global
business environment.
Future challenges for McDonalds in global business environment
McDonald’s is a big name in the food industry, i.e. biggest fast food restaurant chain
uses their strengths to operate within business environment. Despite their effective
functioning, and strength the company faces number of challenges, i.e. cultural, legal,
political, technological, and natural and others. The fast food business need to adopt more
better technologies and systems to increase their productivity, sales and communication
amongst their teams as per their customer expectation (Robertson et al., 2016). The fast food
business operates at a global level in different locations and this generally leads the
organisation face competition at a high level. Other than competition, the company face
certain common challenges in cultural, political, legal, and technological aspects and others
(Robertson et al., 2016).
One of the major issues that the company faces is managing their operations across
different cultures. Indian’s Hindu culture has framed one of the major cultural issues for the
organisation. As for an example, the Indians and Muslims in India do not eat pork, or meat
of the sacred cow, and this creates problem for various stores of the McDonalds.
It has been found through research that McDonalds has shown respect and adapted the
Indian culture in their operations for their food products. The company has created an Indian
version of burgers that are made from Mutten and chicken. All the foods have been

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segregated as vegetarian and non-vegetarian due to the Hindus. Therefore, the company may
face the issue of Hindu culture, for the usage of the oil, and other stuffs in their food
products. For managing with Hindu Culture, the company can employ some of the local
citizens to help them in their business in context to a particular culture (Gao, 2018).
Discussing about the political and legal aspects, the fast food business must respond
to the existing laws and rules across different countries. They must comply with the health
and hygiene regulations as it mainly affects the people. Issues of government tensions
between countries are one of the challenges for the company. For an instance, dealing and
communicating with the Russia is one of the issues to be faced by the company in their future
years. It has been analysed that complications amongst government parties could shift their
current trade agreements, which creates a hostile environment for the fast food operate
effectively (Hartmann et al., 2017).
The fast food business has encountered number of problems in context to the legal
environment. Many law suits and cases have been filed against McDonalds, and many of
these have involved the issue of trademark. The fast food joint may further face problems in
legal matters, in context to their advertising methods, which mainly portray children. It has
been found in the previous records also, that McDonalds face complexity due to their
exploitation strategy of children through their advertising, and caused indirect exploitation to
the animals. Thus, the company must undertake proper actions and improvise their strategies
to avoid these political and legal issues affecting their operations (Geppert, Matter &
Williams, 2016).
On the economic side of their business the company has faced the problem of
financial crisis in past years. The economic condition of each different country affects the
way they operate, and carry out their operations. Therefore, deciding whether it is a small
decision to purchase raw materials locally or to ship them is a problem to be faced by the
business. Economic recession and low disposable income of the people were found as major
economic problems likely to be increased in the future years (Dekker & Breakey, 2016).
The company is also facing the problem of employee turnover, at a greater rate which
might affect their economic state of balance. Low set up costs, along with rapid expansion
acts to be one main economic challenge for the business in the future years. Keeping prices